Edwards Lifesciences, a developer of heart valves and hemodynamic monitoring, has reported increased net income for the 2012 fiscal year and the 2012 fourth quarter, both of which ended Dec. 31, 2012.
For the fiscal 12 months, the company recorded net income of $293.2 million, compared with $236.7 million for the same period in 2011. Net sales for the 12 months of 2012 increased 13.2 percent to $1.9 billion. Underlying sales growth was 16.2 percent. Domestic and international sales for the 12 months were $812.1 million and $1.09 billion, respectively. During 2012, the company also repurchased approximately 4 million shares of common stock for $353.2 million.
The Irvine, Calif.-based company saw a net income of $91.1 million in the fourth quarter of 2012, compared with net income of $63.1 million for the same period in 2011. During the quarter, the company recorded a global realignment pretax charge of $9 million, primarily related to severance costs. The fourth quarter net sales increased 18.7 percent to $510.5 million compared with the same period last year.
For the fourth quarter, the company reported surgical heart valve therapy product group sales of $197.7 million, which included $29.1 million of cardiac surgery systems sales. Sales grew 3.8 percent over the fourth quarter last year. Growth outside the U.S. was 4 percent, while sales in the U.S. grew 3.5 percent.
Sales of transcatheter heart valves (THV) were $161 million for the fourth quarter, a 72.8 percent growth over the fourth quarter last year. These results were driven by the ongoing U.S. launch of the Sapien valve, with total U.S. THV sales of $80.7 million. Outside the U.S., sales grew by 5.5 percent.
“We continue to expect underlying THV sales to grow 30 to 45 percent in 2013. This would result in global sales of $710 million to $790 million, which includes $390 million to $440 million of sales in the U.S.,” Michael A. Mussallem, chairman and CEO, said in a release.
Critical care product group sales were $151.8 million for the quarter, including vascular sales of $13.8 million. Critical care sales were $138 million, representing growth of 3.5 percent. Growth was driven primarily by advanced monitoring products in Japan and the U.S.
Domestic and international sales for the fourth quarter were $224.9 million and $285.6 million, respectively. For the fourth quarter, Edwards’ gross profit margin was 75.4 percent, compared with 72.2 percent in the same period last year. The company said that the improvement was “driven primarily by a more profitable product mix and the impact from foreign exchange.”
Selling, general and administrative expenses were $177.9 million for the fourth quarter, compared with $163.4 million in the same period last year, driven primarily by U.S. transcatheter launch-related investments. Research and development for the quarter grew 23.4 percent to $74.9 million, which was the result of additional investments in clinical studies and new product development efforts in all of the company's product lines. During the fourth quarter, the company repurchased approximately 2.1 million shares of common stock for $186.9 million.
“[W]e plan to continue investing substantially in the development of transcatheter valves and other structural heart disease therapies, as well as in critical care technologies,” said Mussallem. “We continue to expect full year sales of $2.1 billion to $2.2 billion and earnings per diluted share, excluding special items, of $3.21 to $3.31. For the first quarter 2013, we project total sales of $505 million to $530 million.”